At the end of three years into the second term of the United Progressive Alliance (UPA) government, it appears ironical that it was returned to power with a larger and more convincing mandate. The electoral verdict of 2009 spelt an end to the political aspirations of the Left in India at least in the near term. With the stubborn Left out of the way, many thought the second incarnation of the UPA would witness a bold new phase of economic reforms. Instead, the past three years have seen the government faltering on practically every economic policy that it has tried to initiate.

The UPA-II probably never anticipated that it would have to deal with a far more obstinate and irrational incarnation of the Left in form of the Trinamool Congress (TMC) chief, Mamata Banerjee. One of the two key allies of the UPA, the TMC, right from the beginning, decided to extract as big a pound of flesh as possible in exchange of providing numbers for mustering the required minimum of 272 seats in the Lok Sabha. The past three years have been unpleasantly memorable, not only for Mamata Banerjee?s opposition to almost every single policy move by the government, but also for her bizarre acts, including requesting (read ordering) the Prime Minister to dismiss her own party member from the Cabinet for not presenting a railway budget sufficiently populist by her standards.

The UPA realised pretty soon that with an ally like the TMC it would hardly require enemies. The same conviction also extended to its other ally, the Dravida Munnetra Kazhagam (DMK). While the TMC has at least been spared from allegations of corruption, till now, the DMK has been eager to score as much as possible on this front. DMK ministers have been turning up behind bars with unfailing regularity, including family members of the octogenarian party patriarch, M Karunanidhi. The irregularity in distributing 2G telecom licences has become the mother of all scams in India given the enormous extent of rent seeking it involved. This is no mean feat considering that India is not new to scams and has seen a fair share of them in the past couple of decades. History will surely acknowledge the DMK?s achievement for raising the 2G scam head and shoulders above the rest as a landmark in making money.

Between the TMC and DMK, the UPA has staggered aimlessly and fruitlessly for three years. It has been fighting hard against an active civil society gunning for the government on non-performance and corruption. Anna Hazare?s failing health and the passage of the Lokpal Bill by the Lok Sabha in the last week of last year has given it some breathing space on charges of corruption. But otherwise it has run up a dismal record of non-performance, which is evident from the large number of bills pending with the legislature. More than 100 bills are waiting to be passed by Parliament. Important economic bills such as those on Pension Fund Regulatory and Development Authority (PFRDA), Banking Regulation (Amendment), Micro Financial Sector (Development and Regulation), Trade Marks (Amendment), Forward Contracts (Regulation) Amendment, Companies, National Identification Authority of India, Mines and Minerals (Development and Regulation), National Food Security, Prevention of Money Laundering, Foreign Educational Institutions (Regulation and Entry), Land Acquisition, Resettlement and Rehabilitation, etc, are pending passage. Some of the bills introduced during the first tenure of the UPA have lapsed since they were not cleared by both Houses and were subsequently either not re-introduced or not passed following re-introduction. The failure to pass bills and drawing an almost complete blank on progress in economic policies has made ?policy paralysis? a popular phrase in practically all current discourses on the Indian economy.

Lack of progress on economic policies affects economic performance with a lag. And the effects are becoming visible. The rupee has sunk to a historic low with the FIIs showing little inclination of returning to the equity market. As a result, the economy is running dry on dollars, leading to an almost free fall of the rupee. Since September 2011, RBI has been selling dollars to increase the supply of the greenback and shoring up the rupee. It appears clueless on the next steps. The stock market is plunging downward, minimising returns for all classes of retail investors. And food inflation remains firm despite capital flows drying up. There can?t be any clearer vindication of India?s commodity inflation being a supply-side problem, as opposed to a monetary one. But still, the government is scared to move forward on allowing foreign multi-brand retailers greater domestic market space.

The government has been resorting to the usual excuses?blaming the fractured mandate, multiple political opinions and overt reliance on coalition partners?for the ?policy paralysis?. But aren?t all these inevitable outcomes of democracy? Is there any guarantee that an alternative ally like the Samajwadi Party will be less opposed to reforms than Mamata Banerjee? Democratic outcomes will produce surprises, and coalitions, often comprising incompatible partners, are clearly here to stay. There is no assurance of the 2014 elections making things any better. Then what is the solution? Abandon democracy?

The UPA could have recovered a lot of political goodwill had it been more decisive on policy matters. It is not even four years since it staked its political future to take on the Left and other opposition on the floor of the Parliament to pull off a historic vote of confidence on the Indo-US civil nuclear deal. The aggression was squarely responsible for the Congress garnering more seats and the Left getting wiped out in the elections held within a year. Has this spirit sunk too deep in history to be recharged? A gutsier show, particularly on economic policies, can still rekindle the UPA?s political goodwill apart from revitalising the economy.

The author is head (partnership and programme) and visiting senior research fellow in the Institute of South Asian Studies in the National University of Singapore. He can be reached at amitendu@gmail.com. The views are personal

Glimpses of the UPA government Report to the People 2011-2012

Economic growth

?The expected growth of the Indian Economy was 6.9% during 2011-12 in terms of GDP…. The lower growth in 2011-12 could be attributed to a slowdown in the global economy and tight monetary policy at home to control inflation….?

Investment climate

?The policy on FDI has been further liberalized and rationalized over the year to make it more investor friendly. FDI is now permitted in Limited Liability Partnerships and upto 100% in single-brand retail trading.?

Fiscal consolidation

?With the resumption of the fiscal consolidation process in budget 2012-13, the government seeks to bring down the fiscal deficit to 5.1% of GDP in 2012-13 from 5.9% in 2011-12.?

Price situation

?Headline WPI inflation stood at around 9% during 2011. It however moderated to 6.9% by March 2012.?

Power

?During this year, power plants with aggregate generation capacity of 20,502 MW have been commissioned. This is the highest ever capacity addition in a single year….?

Disinvestment

?Disinvestment as a continuing measure of Economic Reforms. More than R13,894 crore was raised through public issues by Power Finance Corporation and ONGC.?

Urban development

?Twenty-seven projects have been approved during the year at an approved cost of R2,069.48 crore, and Additional Central Assistance (ACA) commitment of R955.31 crore, under the Urban Infrastructure & Governance component of Jawaharlal Nehru National Urban Renewal Mission. Since its inception, a total of 559 projects have been approved.?